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Craig — Take a little here, a little there.

Eventually, the deductions add up.

That was state Sen. Jack Taylor's stance toward severance tax dollars that first pass through the State before returning to their areas of origin.

Taylor, R-Steamboat Springs, made his presentation at a Friday session of the Fueling Thought Energy Summit 2008 at the Holiday Inn of Craig.

Taylor spoke against the practice of directing severance taxes away from areas hardest hit by oil and gas extraction and production, including Northwest Colorado, and allocating the funds to other projects across the state.

Severance taxes are funds taken from minerals that are extracted in Colorado and sold in other states.

Taylor advocated plans that would direct those taxes back to impacted areas. In the current system, those funds are funneled to the Colorado Department of Local Affairs, where the majority of those dollars are later given out as grants.

Through its Local Government Energy and Mineral Impact Assistance Fund, DOLA allots 70 percent of the severance taxes it receives to its grants program. The remaining 30 percent is directly distributed to local governments.

Local entities also can access severance tax dollars through DOLA grants.

However, Taylor said oil-producing counties shouldn't have to apply for these grants when the source of those funds lay within their boundaries.

Taylor said he would like to see more funds directly distributed to areas impacted by energy development.

"When (severance tax money) goes through the state, it gets used for different things," Taylor said, adding that projects on the Front Range can pull from those funds.

"You never get back your fair share, in my opinion," he said.

Ken Parsons, Rio Blanco county commissioner, echoed Taylor's words.

The fear in energy-producing counties is that severance taxes will be "raided for other purposes" across the state, he said.

Taylor belonged to an interim committee that gathered during the summer of 2007 to re-evaluate where severance taxes are going, he said.

The group used information gathered from a working committee that assessed how much Northwest Colorado counties have been impacted by energy development.

Using the group's report and first-hand visits to the areas, interim committee members found several projects on the Western Slope attributed to energy development. Among them was the Interstate 70 interchange near Parachute.

The road will take about $30 million to fix, Taylor said, adding that a road in Rio Blanco County could cost another $86 million to repair.

In the end, interim commission members disagreed on how severance taxes should be used, Taylor said.

Taylor's presentation came after proposed legislation could redirect severance taxes to institutions of higher education or environmental initiatives throughout the state.

The proposed bill also would increase severance taxes by 2 to 3 percent.

Although several area officials expressed support for higher education funding, they said severance tax dollars should first go to areas, including Moffat County, that are impacted by energy production.

Moffat County Commissioner Tom Gray was among them.

"I'm not against education," Gray said after the session.

Still, he said, "Let's not forget that other things exist."

Gene Bilodeau, Colorado Northwestern Community College Craig campus dean, agreed.

"I whole-heartedly agree that (severance taxes) should come back to impacted communities," he said.

Colorado ranks 48th in the nation for higher education funding, he said, adding that conflicting amendments to Colorado's constitution have contributed to that ranking.

In his view, providing funds for higher education should be a concern primarily for the state.

"There's a happy medium," he said.

Bridget Manley can be reached at 875-1795 or bmanley@craigdailypress.com